BACKGROUND BRIEFING NOTES, 7 JULY 1966

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00827A000300100001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 94
• Document Creation Date: December 12, 2016
• Document Release Date: August 20, 2002
• Sequence Number: 1
• Publication Date: July 7, 1966
• Content Type: BRIEF

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7 July 1966
ARGENTINA
The Illia government was overthrown on June 27
primarily because it failed to satisfy the army
high command that it could take positive action to
solve national problems and prevent the Peronists
from winning the congressional elections scheduled
for March 1967.
The generals had been preparing a contingency plan
since early in 1966, and the coup was swift and
bloodless. The coup was greeted with some enthus-
iasm in Argentina because almost all sectors of the
population were convinced that Illia was unable to
make progress in either the economic or political
sphere.
After a series of cabinet meetings, the generals
soon realized that Illia's promises were empty and
decided to move. There was no military opposition,
since the one troop commander who opposed the coup
was arrested when the coup began.
The new president, retired general Juan Carlos
Ongania, is the country's most respected military
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officer and clearly the choice of all sectors for
the presidency.
F
He is considered an effective leader.
Ongania has established a streamlined cabinet of
civilian technicians to head the key ministries and
has been given supreme powers by a "Statute of the
Revolution" which in a sense supercedes the consti-
tution. All elected and appointed officials have
been dismissed, and the government has made no
committment to hold elections or return to demo-
cratic government.
The new government has taken no repressive actions
against politicians and has permitted a free press.
It has closed the offices of all politicial parties
and may plan to take further action against Commu-
nists, who are now in hiding.
Reaction among Peronist groups was surprisingly
mild and indicates that Ongania was able to work
out an agreement with the Peronists before the
coup. He has promised social and labor reform,
but the truce between the government and the Peron-
ists may not last beyond the first labor crisis that
Ongania will face.
ARG-2
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The government's foreign policy will probably not
change significantly, except that Argentina may be-
come more decisive in supporting US hemispheric
policies.
Its Vietnam policy of giving humane
assistance but not sending troops will probably
not change.
Most governments in Western Europe have resumed
relations with the new regime, but states in the
Western Hemisphere have been more reluctant to
take steps in the face of US moves to suspend re-
lations. However, Bolivia was quick to resume ties
and it is expected that many of the other states,
especially neighboring countries, will follow suit.
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7 July 1966
BOLIVIA
T. Rene Barrientos and his Bolivian Revolutionary
Front (FRB) won a decisive victory in the 3
July national elections. Although final re-
sults are not known at this time, the FRB is
guaranteed a majority of the 102 deputy and 27
senatorial seats.
A. The Christian Democratic Community, a front
for the rightist Bolivian Socialist Fa-
lange, and Victor Andrade's faction of the
Nationalist Revolutionary Movement are pres-
ently running second and third respectively
in a close race.
TI. The Barrientos regime will be faced with a va-
riety of new and inherited problems when it
takes office on 6 August.
A. The FRB is not a cohesive, disciplined po-
litical force and may disintegrate in the
near future. Thus the new president will
have to rebuild his political base, possibly
moving his political philosophy to the right
because of military pressure.
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B. Barrientos will also be faced with several
chronic economic. problems, including a
budget deficit. The unfamiliarity of the
new leaders with these problems may cause
considerable delay in developing an eco-
nomic program.
C. The major problem for Barrientos is to ob-
tain the withdrawal of the armed forces
from active control of the government. As
in the past, General Alfredo Ovando is the
key to future government-military rela-
tions. Ovando reportedly told foreign cor-
respondents on 4 July that "the armed forces
will observe the new government and will
act again if they think that the interests
of the people are not well served." Ovando
did not set a limit on how long the military
would give Barrientos to prove himself. If
an issue develops between these two mutually
antagonistic men, there could be trouble.
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7 July 1966
DOMINICAN REPUBLIC
Joaquin Balaguer, who won the 1 June election with
57 percent of the vote, assumed office on 1 July.
In his inaugural address Balaguer outlines the
moderate reformist measures which he appears deter-
mined to carry out during his four-year term.
These measures include
--establishing a respect for law and order,
--an end to special privileges and corruption,
--an austerity program which he warned would be
painful.
Balaguer also promised
--to purge politics from the government-owned
enterprises, especially the debt-ridden Domin-
ican Sugar Corporation,
--an all inclusive agrarian reform program.
So far there has been little reaction to Balaguer's
appointments, which include a 13-man cabinet dominated
by nine members of his Reformist Party or splinter
groups which supported his candidacy.
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--Three cabinet positions were given to leading
members of the opposition Dominican Revolution-
ary Party;
--their inclusion in the cabinet is viewed as a
victory for Balaguer and could weaken Juan
Bosch's position as the leader of the opposi-
tion.
The retention of Defense Minister Perez y Perez in-
dicates that the President plans no immediate sweeping
changes in the military establishment. Perez y Perez
has done a creditable job but is not particularly
popular among his fellow officers.
Since the elections extreme leftist elements have made
no effort to stir up trouble. Apparently this results
from a decision-on their part not to provoke the gov-
ernment while they are reassessing their position in
view of Balaguer's victory.
--They are expected to bide their time recruiting
new members and trying to infiltrate the govern-
ment, until Balaguer's popularity has been weak-
ened by the realities of having to govern or
until such time as the government clamps down
on their activities.
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In foreign policy, the Balaguer government
--has already taken steps to reestablish rela-
tions with the Duvalier regime in neighboring
Haiti;
--ruled out any possibility of recognizing
Castro's Cuba, considered to be both politically
and ideologically outside the Western Hemisphere;
--favors purely commercial relations with the
"socialist countries."
The first contingents of the Inter-American Peace
Force left the Dominican Republic just before Balaguer's
inauguration.
--Unless serious trouble erupts the entire force
is expected to be out of the country before the
end of September.
--Balaguer has the option to request a delay in
the withdrawal if necessary.
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7 July 1966
Recent rioting in Colon and Panama City by Communist-
incited student mobs again points up Panama's serious
urban economic and social problems;
--Widespread unemployment and crowded slum con-
ditions in the cities adjacent to the Canal
Zone,
--the existence of a volatile extremist-led
student population.
--Together, they enhance the likelihood of minor
incidents exploding into major crises.
The alleged repressive measures of security forces
in Colon, and Panama City left the residents embittered;
the prevailing antigovernment mood could well cause
further outbursts at any time.
President Robles, faced with the most serious threat
to the stability of his government since he took
office, acted quickly and forcefully to contain the
disorders.
--National Guard units restored order when it
became apparent to student agitators that the
general public was not supporting their effort.
PAN-1
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Arnulfo Arias did not overtly support the student
Arias has said repeatedly that public disclosure of
a canal settlement will give the Panamenistas ample
opportunity to undermine the Robles government.
--He feels that this is Robles' most vulnerable
point and consequently, is determined to keep
a canal treaty from getting through the
Assembly.
President Robles and his advisers, spurred by the
June riots, have shown a willingness to undertake
some much-needed urban reforms.
--However, the Panamanian president will be
hard pressed to effect a meaningful change
during his remaining term of office because
of limited resources, a weak coalition govern-
ment, and the problem of a canal settlement.
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The Canal negotiations have resumed in New York and
long sessions of hard bargaining lie ahead.
--They repeatedly had been delayed by the Pana-
manian. negotiators' inability to agree on
counter-drafts.
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SEGRET
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7 July 1966
BPAZIL
I. Brazil is entering a difficult political period as the
country prepares for important national and state elec-
tions.
A. In September the legislatures in half of
the 22 states--including politically
important Sao Paulo--elect new governors.
B. On October 3, Congress will elect a new
President to succeed Castello Branco next
March 15,
C. On November 15, Brazilians will elect all
409 members for a new Chamber of Deputies,
and one third of the 66 Senators.
II. President Castello Branco has attempted to prevent the
political chaos that normally accompanies an election
year by forcing the reorganization of two new political
parties to replace the 13 that existed before all parties
were abolished in October 1965.
A. One of the two parties formed, the progovernment
National Renewal Alliance (ARENA),
nominate War Minister Costa e Silva, an army general,
as its presidential candidate.
SECRET
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B. ARENA'S candidate is strongly favored to
win the presidency, since the party holds
a substantial majority in congress. The
executive committee of the opposition
party, the Brazilian Democratic Movement
(MDB),has recommended that the party ab-
stain from presenting candidates in the
indirect elections.
III, The Castello Branco government has provided
relative stability during its two-year rule,
but public unrest is growing somewhat.
A. Organized labor is increasingly dissatisfied
with the government's inability to control
the persistent inflation, which has been
slowed but remains high--prices rose 21
percent during the first five months of
1966.
B. Administration opponents are seeking to
exploit the unrest with stronger attacks
on the government.
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C. Military hardliners continue to seer more drastic
measilres to ensure the success of the movement that
overthrew the Goulart regime in 1964.. Castello
Branco retains strong support from the large majority
of his senior commanders, however.
unist subversion has been generally contained,
D. Comm
but Communist influence is reappearing among unions
and student groups.
Substantial progress has been made in the groundwork
IV.
-
d social im
an
necessary for long-term economic growth an
provement.
to controlling
A. The government has given priority
the inflation, and is likely to continue to do so:
the cost-of-living increase in 1965 was 45 percent,
but this has to be compared with the annual rate of
increase of 140 percent at the time of Goulart's
ouster in April 1964. under
B. Brazil's fiscal position has improved greatly
Castello Branco: the budget deficit has been
sharply reduced; foreign exchange reserves have
grown considerably.
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cECRET
C. Important reforms have been instituted in banling,
in tax system, and in agriculture, and others are
planned soon in the government's administrative
structure, housing, and education.
SECRET
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7 July 1966
PERU
At present Peru's internal security situation is quiet.
I. Peruvian Government's success against Move-
ment of the Revolutionary Left (MIR) guerrillas
has caused serious disarray in the MIR organiza-
and disorganized
tion. Insurgency is now so limited/that army
troops have returned to their barracks.
A. The MIR will undoubtedly have to go through
a lengthy period of retrenchment and reorgan-
ization before it can again operate effect-
ively.
II. Government resources and attention can now be
concentrated more fully on the socioeconomic
reform programs of President Belaunde (BAY-LAH-
OON-DAY).
A. Progress on reforms, which is dependent upon
executive-legislative cooperation, faces an
increasing political threat. The opposition
APRA party, dominant in congress, has taken
a very hard line toward the program, includ-
ing censure of cabinet ministers.
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B. Negotiations between the Peruvian Govern-
ment and the US-owned International Petro-
leum Company over the status of IPC conces-
sions in Peru are continuing. The principal
obstacle to an equitable solution to the
problem seems to be political rather than
economic at this point.
No solution seems
in sight before the end of the year.
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7 July 1966
GUYANA
Guyana, formerly British Guiana, became an independ-
ent sovereign member state of the British Common-
wealth on 26 May 1966. Linden Forbes Burnham is
prime minister.
--Burnham's People's National Congress (PNC) and
the United Force (UF) govern in coalition,
opposed by the pro-Communist People's Progres-
sive Party (PPP) led by Cheddi Jagan;
--Guyana has a governor-general representing the
British monarch;
--Early in 1969, the National Assembly will have
the option to change the country's system of
government to a republic, which it probably
will do, and the governor-generalship will be
a)bblished;
--Premier Burnham wants a republic for prestige
reasons;
-- His conservative coalition partner, Finance
Minister Peter D'Aguiar, (DUH-GARR) strongly
favors continued close ties to the British
crown,,
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According to the constitution, elections must be
held by late 1968. They will use proportional rep-
resentation, an electoral system which favors the
pro-Burnham Negroes (44 percent of the population).
--Burnham is afraid that he might not win the
next election because the voting strength of
the pro - Cheddi Jagan East Indians, who
now amount to 50 percent of the population,
is increasing rapidly;
--Burnham would like to J.mport` Negroes ..from
other parts of the Caribbean or join Guyana
in a federation with predominantly Negro
Caribbean nations to offset East Indian vot-
ing strength;
Both the government and the opposition political
forces are beset with difficulties.
--Premier Burnham's coalition government is an
unnatural mixture of UF conservatives and
PNC pragmatic socialists which got together
only because its leaders (who do not like
each other) are determined to keep PPP's
Jagan out of office;
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--Many times D'Aguiar has threatened to leave
the government because of Burnham's "fiscal
irresponsibility," and because Burnham has
not consulted him on government policies;
--Recently, however, he has stated he will re-
main in government at least until the 1968
elections;
--Burnham would like to govern without D'Aguiar
and the UF, but he needs the extra votes.
Various leaders of Jagan's Pro-Communist People's
Progressive Party--the PPP--have wanted the party to
use violence against the Burnham government. Jagan,
however, fears that Burhham's government might take
extreme repressive measures against himself and the
PPP and has been unable to make up his mind whether
to risk violence. This indecision has prevented the
PPP from acting effectively.
Although the Burnham government is slowly improving
the country's economic prospects, it still faces
serious challenges.
--Unemployment now stands at 20.9 percent and
is rising;
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--That, plus the necessity of finding satisfac-
tory markets for the surplus, high cost, rice
production are among the country's most crit-
ical problems;
--British troops, the main stabilizing factor
in the country, are scheduled to leave on 31
October 1966.;
--It is'hoped Guyana's security forces will be
sufficiently trained to take over f rom:. the
British;
--They will probably be able to deal with small-
scale Violence but would need outside assist-
ance to control large-scale, widespread vio-
lence;
There are border disputes with two countries.
--Caracas claims that the western five-eighths
of Guyanaese territory belongs to Venezuela.
However, on 17 February Great Britain (acting
for its then colony) and Venezuela signed an
agreement providing for the establishment of
a mixed Venezuelan-Guyanese committee which
will be charged with finding a solution within
a four-year period. If the deadline runs out
before a solution is found the border dispute
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is supposed to be settled through some of the
peaceful procedures prescribed in the UN
charter;
--Another border dispute with Surinam is also
likely to be settled peacefully.
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7 July 1966
VENEZUELA
I. At this time Venezuela is one of the more polit-
ically stable and economically sound nations of
Latin America. Although it has been beset in
recent years by numerous political problems, the
government has successfully weathered all storms.
One of
II. /Venezuela's major problem concerns the
leftist guerrillas and terrorists.
A. The Communist Party, or PCV, and the Move-
meat of the Revolutionary Left, or MIR, are at odds
apparently are
still allied and still jointly direct the
FALN--the Armed Forces of National Libera-
tion. FALN activity throughout 1965 and
slight and
through mid-April 1966/has been for the most
part purely defensive, however, and many PCV
and MIR leaders now want to abandon violence
in favor of more legitimate political action.
1. The PCV and FALN are badly disorganized
and demoralized. Funds for terrorist
activities have been almost non-existent
since last summer.
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2. On 18 March, President Raul Leoni freed
from prison four leaders of the PCV and
the MIR who have professed the futility
of the armed struggle. Three of these
were sent into exile.
B. Those favoring non-violence are facing
a split in the PCV/M.IR party leadership.
The more militant members who favor expanded
guerrilla and terrorist operations have bolted
the established parties.and set up their own FALN,
apparently with Cuban support.
C. About 250 guerrillas are still in the field,
although generally inactive for the moment.
They are supported by about 500 urban sy~npa-
thi_zers, many of them in the universities,
who act as couriers, supply clothing and
medicine, and print and distribute propa-
ganda flysheets extolling the guerrillas
and denouncing the government.
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SEUR
7 July 1966
CUBA
Fidel Castro's vigorous appearance on 29 June when
he delivered his first public address since 1 May,
and his 90-minute interview with a Western corre-
spondent on 5 July, dispel recent rumors concern-
ing his state of health and changes in his polit-
ical position.
--withdrawal from public view in May and June
and increasingly bellicose behavior during
the past six months, however, may reflect
Castro's personal frustration over the re-
gime's inability to resolve basic economic
and administrative problems;
--administrative purges of medium level gov-
ernment officials in March and April and the
March show trial of two army majors prob-
ably largely aimed at restoring revolution-
ary dynamism to the regime and at discouraging
other would-be plotters against Castro;
--this spring Castro attacked the leaders of
Communist China, Chile, and Yugoslavia and on
1 May implicitly criticized USSR for not giv-
ing more assistance to North Vietnam;
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--a state of alert was declared throughout Cuba
on 27 May following the killing of a Cuban
soldier by a sentry at the Guantanamo Naval
Base on 21 May;
--Castro may have believed the US was contem-
plating an attack, but it is more likely that
he was concerned about Cuban exile threats
and alleged assassination plots;
--Castro probably escalated the "crisis" to di-
vert public attention from pressing economic
difficulties, to test the efficiency of the
Cuban defensive system, to provide training
for the armed forces, and to flush out "coun-
terrevolutionaries."
Castro's position apparently remains pre-eminent;
nevertheless, several other military and party fig-
ures'are beginning to share the limelight. President
Dorticos' stock, in particular, continues to rise.
--In 5 July interview, Castro reiterated his po-
sition that "as the revolution grows stronger,
individuals become less important,"--a reflec-
tion of his confidence in the Cuban Communist
Party and the continuing institutionalization
of the regime under its aegis;
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--party has probably grown somewhat beyond 55,000
members--chosen for their loyalty and dedica-
tion to Castro;
--There is effective collaboration of party and
military cadres (two thirds of the party's
central committee members are commissioned
officers).
Castro recognizes that he has no alternative to con-
tinued large-scale aid from the Soviet Union and as
a result continues to favor Moscow while relations
with China have been deteriorating.
Castro probably no longer views all of Latin America
as on the brink of revolution but zeroes in on spe-
cific target countries, e.g., Venezuela, Colombia,
and Guatemala.
--Nevertheless, Cuban propaganda on behalf of
armed revolution has been pushed up several
notches since the January Tri-Continent Con-
ference, and Cuba reportedly has sent mili-
tary personnel to help insurgents in the
Congo and to train native and foreign cadres
in Brazzaville.
Cuba's economic performance is spotty and the long-
range outlook remains uncertain. The 1966 sugar
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harvest of slightly less than 4.5 million tons was
two million tons short of the goal, and the outlook
for future sugar earnings is clouded by continuing
harvesting and milling problems, and by uncertain
world prices.
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7 July 1966
COLOMBIA
Colombian politicians are quietly preparing them-
selves for the horse trading that is sure to follow
the 20 July convocation of the new congress.
__The governing National Front won about 55 per-
cent of the popular vote--not seats in con.-
gress--in the congressional elections on
20 March;
ts of the National Front can block
__the opponents
;overnment programs if they control one third
of the seats.
--Lleras is maneuvering to prevent this,
_-the alignment of the new congress will not be
clear until after it convenes on 20 July.
_?-Carlos Lleras Restrepo, elected president by
on 1 May, is expected
a two-to-one majority
to follow generally the policies of the present
government;
-.-he will be inaugurated on 7 August;
.-_he visited several Latin countries recently
and stressed economic integration with US aid.
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The Communists and other potential insurgents are
still split into several ineffective groups.
--The Moscow-line Communist Party may, however,
be preparing to play a more active role in
insurgency.
The army and police devoted their major effort to
guarding the polls and maintaining law and order
during the electoral period.
--They are returning now to the same slow but
successful counterinsurgent program that pro-
duced such good results against bandits and
guerrillas in 1964 and 1965.
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7 July 1966
1. Ecuador faces converging adverse factors which
contain the explicit threat of governmental
.collapse and Communist penetration at the top.
A weak interim civilian regime,
proposes elections
in September to a constituent assembly--an in-.
.stitution historically notorious for ineptitude
venality, and factiousness--while economic and
political considerations imperil the survival
of the government.
A. Of prime concern to the government is fiscal
dleterioration stemming from unfavorable in-
ternational trade conditions, irresponsi-
bility of politically influential export-
import interests, and rising government ex-
penditures in a developing country.
1. The interim regime is unwilling to take
politically unpopular austerity measures
and instead is falling back on sharp cur-
tailment of services and development
projects.
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2, The cost of living has begun a fairly
sharp rise, real wages are falling, the
usually stable currency has declined, and
monetary reserves are at a critical low--
16 million. ,dd
II. The 3. 0 j i IIOSiiis ?8nbu6~ tti p~sto yeas a dg lp
poll ica uture is extremclly uncertain an
measure,
has become more precarious since the return of
ex-President Velasco Ibarra from exile on May 24.
A. Political parties are weak, disorganized,
and intent upon exploiting the constituent
to be
assembly currently scheduled / elected
3 September and convened 3 November.
1. Interim President Yerovi may
the assembly
2. Many politicians hope to use the assembly
to bar re-election of ex-President Velasco.
B. Velasco, could prob-
ably win a direct presidential electio'n' and has there-
fore been.pressing for direct;'instead of,'in-
direct elections through a constituent assembly.
1. Communists and extremists have shown abil-
ity to exploit uncertainty, have been
favored by the permissiveness of Yerovi,
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and stand ready to exploit Velasco to
gain power from the top.
C. The armed forces, the only significant in-
stitution outside of the church, have lost
prestige through the March 1966 fall of the
.military government and are reluctant to
resume power.
1. Some officers might try to forestall
Velasco by a coup, but this would pro-
voke the people and oblige resort to
a harsh dictatorship.
Enlisted ranks tend to favor Velasco,
and recent reports indicate a plot is
afoot among a handful of military offi-
cers and Velasquistas to overthrow the
Yerovi government.
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DCI BRIEFING NOTE
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I. On July 1 Julio Cesar Mendez Montenegro was in-
augurated as president for a four-year term.
A. Mendez' left-of-center Revolutionary Party
(PR) has a majority of 30 in the 55-seat
congress, and has had cooperation from the
rightist Institutional Democratic Party (PID),
which holds 20 seats.
B. The far-rightist National Liberation Movement
(MLN), has only five legislative seats. MLN
members continue to seek support for a coup
among rightistelements in the military, but
at present the MLN is weak and discredited,
representing n.o serious ..threat to the govern-
ment.
C. Several of Mendez' cabinet appointees
backgrounds, which may irk the military.
D. Mendez has so far exhibited an acute awareness
of the need to placate powerful rightist military
have leftist
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and business groups and has made constructive
efforts to allay their suspicions of his liberal
bent.
II. Guatemala's security problems continue.
A. Since early May, the Communist Party action arm,
the FAR, has kidnapped three high-level govern-
ment officials and two youths and has engaged in
other, familiar hit-and-run terrorist activities.
On 24 June, a wealthy attorney was kidnaped and
later released for $100,000 ransom.
B. The three government hostages have been used to
pressure for the release of Communists imprisoned
by the government in early March. Some of the
Communist prisoners are known. to have been exe-
cuted, but the government has publicly main-
tained that the terrorists' claim that their
cohorts are being held is fiction.
C. One of the kidnapped government officials es-
caped on 9 June, and provided information which
may help security forces trail the terrorists
and locate the other victims.
D. Two youths kidnapped on 8 June are being held
for $20,000 ransom each.
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III. There has been some noticeable increase in. public
tension because of the government's inability to
halt terrorist activity, but the apprehension so
far has not come close to the near-panic which the
capital experienced last December when the level
of terrorism reached its height.
IV.. Although the successful transition from military
to civilian government has done much to dissipate
the politically tense atmosphere prevailing a few
months ago, prospects for stability remain uncer-
tain.
A. As a civilian and a liberal, Mendez as presi-
dent will be subject to close scrutiny by the
military and will have little margin for error.
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7 July 1966
The Congo and Mobutu
The Congo has come a long way from the nadir of late
1964, particularly since Mobutu took over last No-
vember. But progress still seems slight when com-
pared with the problems that remain..
The rebellion. is now largely confined to rural pockets;
almost all important roads and population centers are
in government hands. Reasons for government progress
include
--continued use of mercenaries,
--popular disillusionment with rebellion,
--virtually complete cutoff of outside support
to rebels,
--some improvement in the Congolese army's ef-
fectiveness.
With the rebellion?s decline giving him some room to
maneuver, Mobutu is giving almost all his attention.
to enhancing his authority inside the country and
improving the Congo's image in Africa. In the pro-
cess, he has taken, several important actions, some
of them spectacular. He:
--personally directed a running vendetta with
Belgium in. May and June,
CONGO-1
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ordered a summary trial and the execution of
four plotters in. early June,
--intimidated civilian. politicians in the country-
side as well as in. Kinshasa (formerly called
Leopoldville), through the use of the army,
the surete, and visits by cabinet ministers;
--discredited Tshombe, his most formidable rival,
--sought to identify himself as anticolonialist
and pan-Africanist,
--cultivated African leaders such as Kaunda and
Nyerere.
An important part of this effort--and one with a con-
siderable emotional charge for Mobutu as well as for
other Congolese--is the campaign against Belgian,
economic pre-eminence, a campaign. in which the Con-
golese 'won, substantial Belgian concessions through
intransigent negotiating tactics.
The new situation in the Congo has several implica-
tions for the future:
---Further tension with Belgium is likely; Belgium
may be increasingly reserved in. its aid;
--With Belgian. influence eroded, Mobutu will be
less subject to Western persuasion;
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--Mobutu is apt to "shoot from the hip" in sum-
mary political and economic actions,
--The upper levels of Congolese officer corps
probably will become more influential.
Moreover, there are some things which have changed
little, if at all:
--Regionalism and tribal loyalties are constant
hindrances to development of national conscious-
ness;
--The economic situation is only gradually im-
proving;
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7 July 1966
I. In Khartoum, the moderate government has made
little progress in establishing a stable gov-
ernment and solving the Sudan's many problems.
A. The rural-based Umma Party which dominates
the coalition regime is now divided among
conservative older party members and a
younger group favoring modernization and
the development of urban influence.
B. The government has made no real progress thus
far in reaching a political compromise with
Negroid separatists in the three southern
provinces.
1. The military campaign in the south,
where more than two--thirds.of the
18,000-man army is bogged down, con-
tinues at a stalemate. The southern
politicians remain disorganized and
probably have little control over the
active dissidents. A new government initia-
tive to promote peace talks was under way
but the conflict may drag on indefinitely.
SU-1
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II. The Party was proscribed in
Lli late i96 , 1~~..-t still retains influence in and
the trade tin IOU movement and in student at
pro_fessi.ona i t i'oUrps .
A. The Co"If"I'nists can probably exploit both
the tie'.te.riorating economic situation and
groWi1e1 sense of discontent within the
a
cam
milittI'Y over the southern military -
paign.
SU-2
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7' July 1966
I. President Kenyatta's government and ruling
party are now fully in the hands of moderate,
constructive elements since the resignations
last April of former vice president Odinga and
his pro-Communist associates.
A. Odinga's new opposition party holds only
nine seats in the 171 member national as-
sembly and represents no serious threat to
the government at this time.
B. His Communist-financed party failed to win
any significant national following in last
month's by-elections, but its decisive vic-
tory in Odinga's home province reaffirmed
his undisputed leadership of Kenya's second
largest tribe... He has a firm platfn from
which to work for the 1968 general elections.
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7' July 1966
I. President Obote has consolidated his position
and made progress toward greater national unity
with his decisive move against the rebellious
Kingdom of Buganda.
A. The Kabaka (King) of Buganda--the country's
largest and richest region--had been contest-
ing Obote's assumption of full powers last
February. The Kabaka's demand in May that
the central government vacate the capital
city led to the sacking of his palace by
the Uganda Army and his own flight into
exile.
B. Obote has now divided Buganda into four ad-
ministrative Units and has stripped its
tribal leaders of their special privileges.
His actions have been supported by the rest
of the country who resented Buganda's su-
perior, semiautonomous status.
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7 July 1966
RHODESIA
I. Britain and Rhodesia have adjourned until late
July their talks exploring the possibilities for
a negotiated settlement of Rhodesia's illegal
independence. The major stumbling blocks ap-
pear to be Rhodesia's refusal to return to con-
stitutional (British) authority before negotia-
tions for legal independence begin and a harden-
ing of the Smith regime's attitude toward polit-
ical and other concessions for Africans in an
independent Rhodesia.
II. If the rebel regime would return to temporary
nominal British sovereignty, London appears will-
ing to grant legal independence to Rhodesia be-
fore majority (African) rule is attained. Brit-
ain probably wants some minor face-saving con-
cessions to Africans, however, such as steadily
increasing African enfranchisement, guarantees
against retrogressive legislation regarding
voting rights, and some moves against racially
discriminatory legislation.
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III. Although Britain is anxious for a settlement,
it apparently is willing to delay negotiations
in the belief that its economic sanctions pro-
gram,, will soon force Rhodesia to accept Lon-
don's new softened terms.
IV. It is uncertain if a continuation of the sanc
ticns will modify Rhodesia's attitude toward
negotiations.
A. The sanctions have hurt some businesses,
the tobacco crop has not sold as well as
the rebel regime hoped, and a continua-
tion of the sanctions would drive the ad-
vanced Rhodesian economy to a lower level.
Consequently, some Rhodesian businessmen
have pressed Prime Minister Smith to come
to terms with Britain.
B. However, white militants within Smith's po-
litical party, many of whom are farmers who
have been hurt by tobacco sanctions, have
recently become more recalcitrant against
concessions to Britain. They seem to be
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willing to accept a relatively lower standard
of living in order to keep white political
control of Rhodesia.
C. Smith himself may be prepared to reach a
settlement with Britain which would give
Rhodesia legal independence without a time-
table for majority rule. He may believe
such a settlement will be politically
more acceptable within the Rhodesian white
community after a little more awareness
of the long-term effects of sanctions.
V. Rhodesian Africans within and outside the coun-
try have no power to upset any settlement reached
between Pritain and Smith's government.
Vi. Other African governments would not accept the
kind of settlement which Britain now apparently
contemplates.
A. Although they have no power, either, to up-
set such a settlement., several may leave
the Commonwealth.
B. Britain and the West in general would lose
considerable prestige and influence in Af-
rica.
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C. Zambia, the only African country capable of
hurting Rhodesia through economic sanctions,
would probably continue to trade with Rho-
desia until alternate transportation net-
works and trading partners could be developed.
RHOD-4
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7 July 1966
TANZANIA
President Nyerere's militant approach to the prob-
lems of southern Africa is still the dominant factor
in Tanzanian, affairs.
__Tanzanians continue to train refugees from
Mozambique and Rhodesia and to equip them from
stockpiles of Chinese and Soviet arms. Nyerere
has stopped military aid to the Congolese rebels
and claims to have ceased support for Malawi
dissidents.
__Tanzanians have been financially strapped since
London withdrew a $21 million loan last December
after Dar es Salaam broke relations over the
Rhodesia issue.
--last month they signed their first development
loan agreement with Moscow and another small
credit agreement with Peking.
--relations with the US have improved slightly,
although the Tanzanians remain. suspicious of
US intentions in southern. Africa.
on Zanzibar the pro-Communists are continuing
their efforts to eliminate US influence from
the island.
CONFIDENTIAL
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7 July 1966
%We
DCI BRIEFING NOTES
GHANA
1. In Ghana, where the radical regime of President
Kwame Nkrumah fell apart last February while he
was in Peking, the new leaders are Western.-
oriented political moderates.
A. The senior army and police officers who
staged the coup had long been, dissatisfied
with Nkrumah's arbitrary rule, his ties with
Communist countries, and his economic follies.
B. Since their take-over, they have given every
indication. of being particularly friendly to
the United States.
II. The change of regime has been popular with the
general public. Nkrumah had alienated virtually
all segments of society since he led Ghana to
independence nine years ago.
A. One of the most significant factors in the
erosion of his once massive popularity was
the tightening economic squeeze felt at all
levels in recent years as Ghana's economy
deteriorated.
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b the coup leaders
III. The interim regime set up y
seems to be functioning reasonably smoothly.
A. General policy is set by a National Libera-
tion council of four army and four police
officers, all of whom are pro-Western* it
is headed by popular General Joseph Ankrah,
Nkrumah last year.
who had been fired by
B. The Council is backed up by several specialized
committees dealing with such matters as
foreign affairs and the economy. The committees
are staffed by able; and, for the most part
Western-oriented senior civil servants.
C. Recently the NLC yielded to pressure from
the former opposition United Party and set
up a 23-member political advisory committee.
D. For the present all political parties and
activity have been proscribed, but some such
activity is in fact going on.
E. Over 1,000 Nkrumah regime opponents were re-
leased from detention and others have re-
turned from exile. In turn, at least 500
Nkrumah regime activists were incarcerated,
including cabinet ministers and members of
the dissolved parliament. Small groups of
of these are now being released.
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IV. The new leaders have promised to return-Ghana to
representative civilian government, but evidently
will be in no hurry to do so.
A. They are publicly committed to sponsoring a
new constitution., holding a referendum, and
then to turning power over to Whatever po-
litical force emerges from free elections.
B. However, General Ankrah has indicated
the country must first undergo a
period of re-education. for 18 months to two
years.
C. In the economic sphere, which offers the most
pressing problems, the new regime appears to
have a sound appreciation. of the magnitude of
its task and a determination to take whatever
austerity measures are required to get the
economy on an even keel again.
1. In addition. to the emergency aid provided
by the International Monetary Fund and the
US, help has already been forthcoming from
West Germany, Canada, and the UK.
2. A three-month respite from external debts
was won in June from the creditor nations.
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V. In external affairs, the new government has greatly
reduced Ghana's involvement with the Communist
world and aligned it with the moderate African.
states.
A. All Soviet and Chinese technicians have been
expelled and the Soviet and Chinese embassies
are limited to 18 persons. A complete rupture
with Peking may still be coming. The Albanian,
North Vietnamese, and North Korean. embassies
have been. closed.
B. Most Ghanaian embassies in bloc countries are
being closed down, and efforts are under way
to reduce the number of Ghanaian students
(about 1,000) there.
C. In. Africa the new regime has won general ac-
ceptance, and relations with moderate neighbor-
ing states have markedly improved.
VI. Provided no serious split develops.within the
ruling junta, the new regime seems securely in
power for sometime to come.
A. Unavoidable additional economic hardships this
spring and summer may well accelerate the nor-
mal dissipation of some of the post-coup elation.
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B. Nkrumah does not now appear likely to pose
any real threat, although he clearly harbors
dreams of making a comeback.
1. Guinea's Sekou Toure welcomed him to
Conakry and made threatening noises about
a forceful restoration, but neither Toure
nor any of Nkrumah's other radical friends
has given. him any significant material
support.
2. There now are indications Toure has be-
come concerned about adverse repercussions
from his extreme pro-Nkrumah stance and
has begun. to back off.
vavp~
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7 July 1966
DCI BRIEFING NOTES
NIGERIA
(MAP)
1. Africa's most populous country (about 50,000,000)
has been. ruled by its 10,000-man army since lower
echelon. officers initiated a bloody coup on 15
January.
A. The upheaval swept away the old power struc-
ture over which conservative northern. Muslims
had steadily tightened their grip since in-
dependence in 1960.
1. The former federal prime minister and
two of four regional premiers were killed
along with a number of senior army officers.
2. However, the new government has found It
necessary to retain. much of the old admin-
istrative network.
B. Although the coup was initially accepted with
considerable enthusiasm throughout the country,
the future of Nigeria remains very uncertain.
It has been a stronghold of moderate Africa.
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 II. The interim regime was established by army com-
mander Ironsi (Maj. Gen. Aguiyi-Iron.si), who in
effect took over the coup from the younger con-
spirators. The regime is reformist rather than
revolutionary in outlook.
A. It has promised to maintain domestic peace,
end corruption and tribalism, and provide
a new constitution.
1. Various investigative and study commis-
sions will be working on. the country's
problems for some time with military
rule continuing for at least three years.
B. In foreign affairs the military government
is generally well disposed toward the West
and has so far continued the preceding re-
gime's aloofness toward the Communist world.
1. Assurances have been. given. that foreign
investments will be safeguarded.
2. However, a more forcefully African. pos-
ture is taking shape.
III. Internally the country is headed for a stronger
central government, but there is strong opposi-
tion in the north to the government's reforms.
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 A. Ironsi's speech on May 24 announcing plans
for a unitary government and a unified civil
service provoked antigovernment demonstra-
tions in. several northern cities.
1. Mobs of rioting Hausas attacked the
homes and businesses of Ibo tribesmen
from the south; over 100 persons were
reportedly killed and several hundred
injured. Order was restored in about
a week.
B. The simultaneous nature of the demonstrations
may indicate some coordination among northern,
political leaders and civil servants.
C. The north has been unhappy for some time over
the January coup, which many view as an "Ibo
takeover."
1. Northern civil servants fear--with good
reason--that they will be replaced by
better qualified southerners in. open
competition in a unified civil service
system.
2. Since the disturbances, the government
has virtually retracted its stand on
centralization. It has also indicated
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a willingness to discuss important mat-
ters affecting the north with the tradi-
tional leaders there.
D. Tensions and tribal enmities probably will
continue with the possibility of renewed
outbreaks of violence in the north or in
other parts of the country.
IV. An early breakdown of discipline in the army,
which has its own. intertribal tensions, con.-
tinues possible.
A. There was reluctance to test the army's
cohesiveness during the recent disturb-
ances in the north. At best, the ability
of the country's relatively small (police
18,000; Army 10,000) security forces to en-
sure law and order is problematical.
1. The younger officers active in the Jan-
uary coup remain a problem. Ironsi has
placed most of them in detention, but
apparently dares not punish them as they
are widely regarded as heroes.
2. Some Western observers anticipate more
coups by army elements.
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C. Over the longer run, there is a real ques-
tion, whether the politically inexperienced
new leadership will be able to cope with
the basic problems of regionalism, tribal-
ism, and underdevelopment any more success-
fully than the old government.
1. Popular euphoria has already begun to
fade as the regime'fails to take deci-
sive steps to halt rising prices or ma-
terially improve the lot of its citizens.
2. Conflicting pressures coupled with in-
effective leadership could culminate in.
serious strife.
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Tr,~
7 July 1966
DCI BRIEFING NOTES
MOROCCO
1. Morocco's King Hassan, skillfully keeps his oppo-
sition, divided and off balance, but his relations
with France are chilly and those with Spain are
complicated by Morocco's territorial claims.
A. The kidnaping in. Paris last October of Moroc-
can opposition. leader Ben Barka complicated
other problems, such as Moroccan nationaliza-
tion of French agricultural properties and
imposition. Of trade controls. Both ambassa-
dors were recalled in January; but Paris and
Rabat seemed disinclined to take more drastic
steps.
B. Hassan has named a new ambassador to Madrid,
one with personal ties to Franco, in an. ef-
fort to improve relations and press Morocco's
claims to Spanish-held Ifni and Spanish Sahara.
C. A recent in.ciden.t on the undefined Moroccan-
Algerian. border has revived both fears of an
Algerian invasion and requests to the US and
other western sources for new military equip-
ment.
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DCI BRIEFING NOTES
ALGERIA
7 July 1966
1. In Algeria, Col. Boumediene's control remains
unchallenged. Rumors of impending government
shakeups, realignments and in-fighting continue.
A. He is moving slowly to untangle the prob-
lems inherited from Ben Bella last year
but discontent has mounted. A severe
drought this year, unemployment and lack
of development programs and technical and
managerial skills remain the principal
problems.
B. Algerian relations with France continue to
be fairly good. However, nationalization
of 11 mines (compensation promised) and an.-
nouncement that French abandoned properties
were the property of the Algerian state
seem certain to complicate the already dif-
ficult economic negotiations which stalled
when Foreign Minister Bouteflika abruptly
departed from Paris on 29 April.
C. Boumediene's trip to Moscow in December, his
first visit outside Africa as chief of state,
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seemed designed to get promised Soviet eco-
nomic projects under way, and to thaw Soviet
relations, which had chilled with the June
coup.
1. The Soviets agreed to finish the projects
under way and apparently no more.
2. Boumediene then. endorsed many Soviet
positions.
3. However, Algerians seem to be seeking
alternative developers for such projects
as the Soviet promised integrated steel
complex and may have closed down the So-
viet-run petroleum and technical institute
near Algiers.
4. The walkout of the Algerian observers
from the 23rd CPSU because of the pres-
ence of a delegation. from the banned
Algerian Communist Party has apparently
hampered close political relations.
5. Soviet arms and instructors continue
to arrive and several hundred Algerian.
military trainees are still in the USSR.
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D. Despite repeated denials of rumors that the
US is establishing bases in Morocco and
Tunisia, the Boumediene regime acutely fears
"encirclement.'! As a consequence, it is
mending fences with radical regimes in the
Middle East and Africa.
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7 July 1966
DCI BRIEFING NOTES
THE HORN
1. The Horn, of Africa (Ethiopia, Somalia, Fren.ch
Somaliland) remains an area of endemic in.sta-
bility.
A. Haile Selassie still is the major influence
in the area, but at 74 plus his grip is
weakening somewhat and some jockeying for
position has already begun..
1. Young educated Ethiopians in the govern-
ment and army are anxious for reforms
and have been. pressuring the Emperor:
for changes, but he is willing to move
only slowly.
2. Most observers discount a coup and the
Crown Prince is expected to succeed to
the throne. The Crown Prince is pretty
much an. unknown quantity and may be the
center of disputing traditional/modernist
forces.
B. Internal dissidence in four Ethiopian border
provinces, including Eritrea
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has con-
tinued, keeping most of the Ethiopian security
forces occupied.
C. The presence of ethnic Somalis in Ethiopia
and also in. Kenya keeps the pot boiling be-
tween, these countries.
1. The Somali Republic, with its Soviet-
trained and supplied army, is actively
working for the union of all Somalis
with the republic, and is training and
assisting Somalis in Ethiopia and Kenya
in guerrilla activities.
2. Ethiopian.-Somali border clashes have re-
ceded somewhat, but tension on the Somali-
Kenya border are high as a result of a
sharp step-up in. Somali raids in north-
east Kenya.
a. Ethiopia and Kenya, already alarmed
by continuing deliveries of Soviet
military aid to Somalia, are consult-
ing on ways to stamp out Somali in-
surgency.
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b. Nairobi recently broke off trade re-
lations with Mogadiscio, halted
Somali airflights into Kenya, and is
engaging in new tougher security
measures, including occasional "hot
pursuit" across the Somali borders.
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7 July 1966
INDIA-PAKISTAN
The future of Indian-Pakistani relations remains in
India wants better relations with Pakistan, if only to
satisfy US and Soviet demands for peace on the sub-
continent.
--The government of Mrs. Gandhi believes strongly,
however, that meaninlu -]ndian concessions on the
status of Kashmir now would be political suicide
with general elections coming up next February.
--Deep seated suspicions concerning Pakistan's
intentions further limit New Delhi's willing-
ness to cooperate.
Pakistan's President Ayub, on the other hand, is under
heavy pressure to show some progress on Kashmir.
--Pakistan may decide to take the problem back
to the UN Security Council again, hoping that
the US might support a new Kashmir move and
that the USSR might not automatically veto it.
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The Ayub government has shown continued interest in
maintaining close relations with the Chinese Communists.
--Military hardware supplied by China was paraded
through the streets of Rawalpindi during the
March 23rd Republic Day parade.
--The intended message to India was clear: China
stands behind Pakistan in any future subcontinental
quarrel,
Ayub also has tried to avoid antagonizing the US. He
is vitally interested in the continuation of US economic
aid (recently resumed), and may hope that Washington
eventually will permit the renewal of shipments of
arms and spare parts.
The Tashkent Declaration of January 10th eased much
of the tension created last fall during the fighting
between India and Pakistan, but the basic underly-
ing problems remain. There also has been a gradual
dissipation of the 9 I'ashken.t spirit."
The first round'of cabinet level talks held in Rawal-
pindi' in early March was generally disappointing.
--Pakistani negotiatdrs insisted that the Kash-
mir-issue be tackled first; the Indians were
not willing to do so.
 Approved For Releas,jDGMW' CIA-RDP79T00827A000300100001-3
--Both countries want to keep the dialogue going,
but no date has been set for the second round
round of cabinet-level meetings.
--Proposals for an early Ayub-Gandhi summit meet-
have been received without enthusiasm by the two
leaders.
Efforts by India and Pakistan to involve the USSR
directly in reviving "the Tashkent spirit" have met
with no success and the USSR appears most reluctant
to again put its prestige on the line in attempting
to resolve differences.
Some benefits did result from the Declaration:
-.-The forces of the two countries withdrew to
to the positions held before August 5th,
--D:i:plomatic envoys returned to their posts,
mail and telecommunication were re-estab-
lished, overflights were authorized, hos-
tile propaganda was reduced, and economic
relations are slowly being revived.
INPAK-3
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Pakistan now is trying to bolster its armed forces.
--It is in the process of raising at least two
two new divisions,
--Pakistan?s armored units and air force were
drastically affected by suspension of US
military aid last fall,
--Pakistanis believe their primary need is for
spare parts for previously supplied US tanks,
planes, and other combat equipment,
--Washington?s l.ii:tin; cf the prohibition on
the sale of nonlethal military equipment
has been greeted with little enthusiasm.
--Indonesia supplied Pakistan
MIG-19s, 25X16
motor torpedo boats and small arms, last autumn,
but withdrew the naval craft.
--Suadi Arabis, Turkey, and Iran have given
limited quantities of arms and ammunition,
--France reportedly has closed a deal to de-
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25X1 B
--Communist China has become a major supplier
since
of military equipment to Pakistan / the
Indo-Pakistain hostilities last fall.. Small
arms, artillery,
MIG-19 aircraft, and a few
medium tanks,
25X1 B
IL-28 medium jet bombers have already been
received from China. In addition, Pakistani
pilots have gone to China to receive MIG-
flight training,
--A Pakistaini missions, under Air Force
Chief Nur Khan, went to Moscow in late June,
presumably seeking arms from the USSR.
India also has increased the size of the army
and now holds an approximately 5:1 numerical ad-
vantage over Pakistan, New Delhi reportedly has
secured new promises of arms deliveries from the
USSR and several other European Communist states,
25X1B - Iaircraft, as well as PT-76 and
T-54 tanks;. artillery, and surface-'to-air
missile equipment arrived in Bombay in late
February and early March, the first major
shipment of Soviet bloc equipment since
last year's fighting;
--Bloc countries have already delivered to
India--or are committed to deliver--arms
T PAX-5
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and equipment
25X1 B
The Chinese are maintaining substantial forces in
Tibet although there have been no significant
clashes along the 1,500-mile Sino-Indian frontier
since mid-December. They may resume their harass-
ment of Indian border forces in coming months.
--Indian military leaders are confident they
can withstand a Chinese assault but they do
not expect an early large-scale Chinese at-
tack.
-Future border clashes are likely, however,
as China seeks to remind all parties in-
volved in the South Asian situation that
China cannot be ignored in any new develop-
25X1
ments in the area,
--The Chinese capability for intervention on
a major scale, however, is somewhat lim-
ited by the problem of deploying and sup-
plying large forces across Tibet. Rail-
heads are 500 to 1,000 miles or more re-
moved from the critical pressure points
against India.
INPAK-6
25X1
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--Many prominent Indians--including important
Congress Party figures--reacted with alarm
to the third Chinese Communist nuclear test.
Nevertheless, the Gandhi government has re-
iterated its firm resolve not to develop an
Indian nuclear weapons system. Pressures
for an Indian bomb will grow as the Chinese
test program advances, but New Delhi will
probably be able to hold to its policy of re-
straint for the next two or three years.
Both India and Pakistan--but primarily India--
have faced severe food problems as a result of
one of the worst droughts in recent history.
--Minimum Indian domestic requirements for
food grains for 1966 are now estimated to
be some 11-12 million tons above anticipated
production. Over 10 million tons have been
committed thus far, mostly under US PL-480
agreements. Even:_with a good autumn rharyest?, In-
dia will need to import 7-8 million tons in
1967.
--Although massive imports have eliminated the
threat of widespread starvation, extreme hard-
whip may yet be experienced in many areas during
the next three months. Indian efforts to control
distribution are hampered by lack of transporta-
jppp- vedaEgr ~glegVMj 0 8t:i9#-FRF 79tT fflg37AO00300100001-3
SECRET INPAK-7
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9lb
Across the border, Ayub is also faced with growing po-
litical problems. The increasingly restive popula-
tion of East Pakistan has long been suspicious of the
central government, whis is dominated by West Pakis-
tan.
--Opposition leaders, hoping to capitalize on dis-
disatisfaction with Ayub's handling of East
Pakistan's defenses during the war with India,
have been pressing the central government to
grant greater autonomy to the province.
--The government, fearful that appeals of autonomy
today could become demands for independence
tomorrow, appears to be turning to more repres-
sive measures in dealing with its opposition.
In May, several East Pakistani opposition lead-
ers were thrown in jail and in June the largest
opposition newspaper in East Pakistan vas
closed down.
--The government's problem in East Pakistan have
been further increased by popular dissatisfac-
over rising food prices. Recent reports indi-
cate that serious food shortages may develop
before summer is over.
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In West Pakistan, Ayub continues to face popular
discontent over his foreign policies.
--The recent renewal of US economic assistance
and the nearly concurrent removal from the
cabinet of anti-Western Foreign Minister
Bhutto have been seized upon by Auyb's oppo-
nents as indications that he is veering closer
to the West and away from Peking.
--The subsequent brief visit to Pakistan by
Chinese Premier Chou En-lai probably re-
flected Peking's desire to reassess Auyb's
position on East-West relations in the light
of recent developments.
--Bhutto, who has considerable popular appeal,
could become a thorn in Ayub's side if he
allows himself to become a rallying point for
the presently disunited opposition forces in
West Pakistan.
--Ayub, however, appears to have retained the
all-important support of the armed forces
and;:thus, should be able to survive any
challenge to his position in the immediate
future.
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 Approved For Relegg/J( TIA-RDP79T00827A000300100001-3
7 July 1966
I. The economy continues to deteriorate under Gen-
eral Ne Win's Marxist-oriented "Burmese Way to
Socialism."
A. Foreign trade is still declining and foreign
exchange reserves have dwindled.
B. Artificial shortages in consumer commodities
have developed as a result of the government's
inept handling of the distribution system.
C. Two widely publicized actions by the govern-
ment have not improved the economy.
1. The People's Stores Corporation was re-
placed by a Trade Council in October1965
but this was, largely a change in name,.
only.
2. The Trade Council's control over the pur-
chase and sale of consumer goods, indus-
trial raw materials, and spare parts was
greatly expanded last January, but this
action is expected merely to compound the
country's acute distribution problems.
I
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D. Ne Win admitted recently that the economy is
in a "terrific, mess," but he declined to
offer any new policies.
II. Ne Win has been similarly unsuccessful in coping
with the problem of mounting insurgency.
A. Although insurgency normally rises at the
beginning of the dry season in October, the
level of activity now appears to be some-
what higher than usual.
B. Ne Win reportedly estimates that his govern-
ment now controls only 65 percent of the coun-
try, as compared to 75 percent four years ago.
III. The government continues its policy of neutrality,
nonalignment, and noninvolvement in international
affairs.
A. Ne Win, however, is sometimes compelled to
assume a more accommodating posture toward
Communist China than he probably desires be-
cause of the latter's vastly superior might
and close proximity.
IV. Ne Win's government is unlikely to undergo any
significant changes in the foreseeable future,
barring some external development which pro-
foundly affects Burma's interests.
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A. Economic problems will persist, but aid
from abroad, abundant natural resources, and
the moderate needs of the agricultural
masses should prevent a sudden collapse.
B. Insurgency will remain a constant drain
upon the government's resources and will
continue to be the major obstacle to the po-
litical and economic integration of the
country.
V. Tide Ne Win regime is not currently endangered
because:(1) the populace remains apathetic;
(2) the insurgents lack unity and centralized
direction; and (3) the army remains essentially
,loyal despite certain misgivings about Ne
lWin' s !'Burmese Way."
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7 July 1966
SYRIA
In Syria the radical Baathist clique which seized
power in February from the relatively moderate lead-
ers of the Baath party is still trying to broaden
its base of support and is. threatened by increas-
ingly serious internal factionalism.
--the Baathists have made overtures to all
"progressive elements," including Syrian Com-
munists;
--the present cabinet includes one Communist
and the leader of the Syrian Communist party
was permitted to return in April after eight
years in exile;
--the regime also attempting to improve rela-
tions with Egypt's Nasir, a long-time enemy of
the Baathist movement.
--more importantly, the Syrians are working hard
to warm their relations with the USSR. Moscow,
evidently seeing the chance of a new break in
the situation, agreed in April to provide
$150-175 million in Soviet credits for con-
struction of Syria's long-planned dam on the
Euphrates River.
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25X1
7 July 1966
THE ARAB-ISRAELI SITUATION
I. In the Middle East, trouble over the Arab
scheme to deprive Israel of some of the Jordan
River water has diminished for the time being.
A. Arab leaders decided last September to avoid
further clashes with Israel over this issue
until Arab military strength is increased.
B. Work on the diversion canals in Syria and
Lebanon accordingly was postponed, but
Lebanon and Jordan are planning to construct
two related dams which Arab leaders do not
consider to be "provocative."
C. The decision to slow down was prompted by
the exposure of Arab military weakness in
the face of Israel's artillery strikes
against Syrian canal construction sites on
three occasions last year.
App
25X1
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25X6
'.r
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II. Tension between Syria and Israel remains at a
high level. Israel might strike directly at
III. The announcement on 20 May of the US sale to
Israel of "a limited number of tactical air-
craft" (in fact, 48 subsonic A-4F Skyhawk at-
tack bombers) has been interpreted by Nasir
and anti-US Arab extremists as confirmation of
US favoritism toward Israel. Nasir has at-
tempted to link Saudi Arabia and Jordan with
the US-Israel agreement because of their re-
cent arms agreements with the US.
Fatah.
terrorist activities continue along the Syrian
border, Israel has previously retaliated
against alleged Fatah terrorist bases in Leb-
anon and Jordan whose governments oppose the
Syria,
.RIS-2
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 Approved For ReIea"fO Q2 giA-RDP79T00827A000300100001-3
7 July 1966
The Communists in Thailand appear determined to
step up the pace of their subversion.
Peking-based "Thai Patriotic Front," marked its
first anniversary last December by calling for "armed
struggle" in Thailand to be expanded into a "people:'s
war," andnow openly warning that the "Vietnamese
people" may become involved in Thailand.
Front's statement is pegged to the recent announce-
ment that a small Thai military contingent is going
to South Vietnam. The statement also puts great
emphasis on the expanding US presence in Thailand,
apparently in an effort to portray- the Communist
movement as a struggle for independence.
The Communists inside Thailand have become more
active during the past several weeks. A marked
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increase in the pace of Communist terrorism, train-
ing, and recruiting has been noted, principally in
the northeast provinces.
On 28 May, a 22-man government police patrol was
ambushed by an estimated 100 insurgents in Nong Khai
Province, and on 28 June, terrorists boldly entered
a police station in Udorn Province and seriously
wounded three policemen.
The Communists have also launched their first
attacks against regular Thai Army elements in the
northeast, with a small attack and ambush in Ubon
and Sakhon Nakhon provinces in mid-May.
In part, the insurgents appear to be reacting
more aggressively to recent government suppression
operations.
The Thai government, continues to give strong
backing to US foreign policy, particularly in South-
east Asia. The Thais have been reassured over the
past year by US determination in South Vietnam.
Thailand's material contribution to the effort
in South Vietnam has been largely confined to al-
lowing the US to fly reconnaissance and combat mis-
sions into Laos and North Vietnam from Thai bases.
THAI-2
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Although they have recently agreed to send two
small ships and one plane with Thai crews, thus far
the Thais remain generally reluctant to provide
South Vietnam with combat troops or significant
military or economic aid.
The traditional animosity between Thailand and
Cambodia has in recent months erupted into a se-
ries of armed clashes at isolated border posts along
the 400-mile frontier.
The situation is aggravated by Thailand's support
of the anti-Sihanouk movement of dissident Cambodians
known as the Khmer Serei, who have made several
forays into Cambodia from Thai territory, provoking
Cambodian counteroperations..
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L 7AN IA
ITALY L -
ITALY
~~ THENS
b, e
ME D I TE I? R A NE AN
CYPRUS
Principal British sovereign base
Road
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 Approved For ReJE(c T CIA-RDP79T00827A000300100001-3
7 July 1966
Communal tensions
the island have risen with the
summer heat.
Bombings, kidnapings, and other incidents have mul-
tiplied on both sides; twice since 1 June Makarios
has clamped restrictions on the freedom of movement
of Turkish Cypriots to and from the Turkish quarter
of Nicosia. He claims that Turkish Cypriots are
guilty of bombings in the Greek sector of the city.
Turkish Cypriot reaction to the first ban was a .
further withdrawal from intercommunal cooperation--
Turkish judges now refuse to take part in court ses-
sions on the Greek side--and a move toward the de
facto partition desired by the Turkish Cypriot lead-
ership.
Ankara' s failuure to back up an "ultimatum" it is-
sued following the second ban confirmed Greek Cyp-
riot convictions that Turkey reacts militarily only
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to a provocation that jeopardizes its basic rights
on the island.
The Turk's failure to respond with force in this
situation also may undermine the confidence of
the Turkish Cypriot community that Ankara really
intends to protect Turkish Cypriot rights.
Makarios' policies have won him no friends in the
world forum, but the Turkish Cypriot reaction gives
credibility to his argument that cooperation with
the Turkish community is impossible.
Month-long UN mediation efforts have failed to re-
solve road con-
struction a confrontation over Greek Cypriot Nico-
sia. in the Trypimeni area northeast of
sia. Both factions:. have set up armed positions
overlooking the road site.
Makarios reportedly will accept "demilitarizing"
the area, but the Turkish Cypriots are holding
out for a number of observation posts to assure
that Greek Cypriots do not resume construction.
The Greek Government is apprehensive over possible
military action by General Grivas, the Greek-con-
trolled commander of Cyprus armed forces, who
CYP-2
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recently was given unlimited authority by Makarios
to "solve" the issue if negotiations fail. Other
top Greek officers on the island are to keep Athens
informed of Grivas? intentions.
Should the Greek Cypriots fail to keep the upper-
hand in the Trypimeni issue, Makarios will likely
remind Athens that the problem was in its hands,
and the longstanding feud between Makarios and
Grivas could resume.
Both Greece and Turkey seem to hope to make a suc-
cess of their latest round of Cyprus talks, but
neither has given any indication that it is will-
ing to make the necessary concessions. Moreover,
any attempt to impose a solution on Makarios will
undoubtedly result in continued frustration.
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1
,ALBANIA
t 1NY''
ITALY :~GREEC.~E~,
-ATHENS
AL'.
,ANKARA
T U R K E Y
Mersin. , Iskenderu,
f: /1, /i' I N E A N ,fit
LEBAN
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EGYPT
Kokkina
Xeros' Lefka
'Polis-
Kyrenia TRYPIMENI
NICOSIA'S /'
sta'
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w,e,
CYPRUS
Principal British sovereign base
Road
STATUTE MILES
62694
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7 July 1966
The Chinese Communist Leadership
The most important thing about Communist China is
that it is undergoing a leadership upheaval of some
--Pronouncements from Peking have been cryptic.
--It is difficult to say exactly what is going
on.
We believe that China has, in a sense, entered a
transition period even before Mao Tse-tung's final
departure.
--Mao's absences from the public scene are
growing longer and longer, suggesting recur-
ring illnesses.
--Circumstances surrounding his absence for
five and one-half months this past winter
and spring are unknown.
--It is not likely that events would have
developed as they did if his grip on. the
party had not slipped.
Mao Tse-tung probably remains the dominant leader,
and can. probably impose his will, but at least since
CHI-1
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CONFIDENTIAL
November he has not had the sure sustained control
of events that a party leader aims at.
--It is possible, moreover, that ambitious col-
leagues are pushing Mao to turn over more and
more of the party machinery and the authority
to make domestic and foreign. policy decisions.
--In fact, we may be seeing the beginning of the
end of the long era of Mao Tse-tun.g.
At the moment, the relative standing of Mao's immediate
lieuten.an is far from clear. Disclosures already
made point to a power play by Teng Hsiao-ping, the
powerful general secretary of the party.
--Teng has been, working with or using Lin. Piao,
whose place in the army would make him a use-
ful ally.
--Teng probably built the case that led to the
recent ouster of Pen.g Chen, a rival in. Mao's
inner circle of advisers.
At the present moment, the situation. is still fluid,
but not as much as it was a month or two ago.
--The Peking People's Daily announced on. 1 July Z
that the struggle was over.
--The paper described recent events as an attempt
by "counterrevolutionary" plotters to seize
CHI-2
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CONFIDENTIAL